Oklahoma City’s Chesapeake Energy is preparing to finalize its $4 billion merger with Houston-based WildHorse Resource Development Corp., a merger announced in late October.
In a filing Wednesday with the Securities and Exchange Commission, Chesapeake indicated its shareholders will hold a special meeting Jan. 31, 2019 to consider and vote on the issuance of Chesapeake common stock in connection with the merger. The meeting applies to those shareholders at the close of business on Dec. 24, 2018.
Shareholders will also vote whether to increase Chesapeake’s authorized shares of common stock from 2,000,000,000 shares to 3,000,000,000 shares. The plan also calls for an increase of the company’s board of directors from 10 to 11 members.
In turn, wildHorse stockholders will also hold a special meeting on the same date and decide whether to proceed with the mrder agreement.
Notification of the special meetings were made in the SEC filing and included a letter that was sent to the shareholders of each company.
“For WildHorse stockholders, if the merger is completed, you will be entitled to receive, for each issued and outstanding share of WildHorse common stock owned by you immediately prior to the effective time of the merger, at your election, either (i) 5.336 shares of Chesapeake common stock and $3.00 in cash (which we refer to as the “mixed consideration”), or (ii) 5.989 shares of Chesapeake common stock (which we refer to as the “share
consideration”), in each case, with cash in lieu of any fractional shares (which we refer to as the “merger consideration”), with certain exceptions as further described in the joint proxy statement/prospectus accompanying this notice.”
The original announcement of the merger was made Oct. 30 and indicated it was a cash-and-stock deal valued at $3.98 billion including the assumption of debt. The WildHorse net debt totaled $930 million as of June 30 and the company had increased its borrowing base to $1.3 billion in early October.
Under the deal, R. Brad Martin will stay as chairman of the board of directors at Chesapeake and Doug Lawler will remain as president, CEO and a director.
WildHorse CEO and Chairman Jay Graham and WildHorse Director David Hayes are expected to be added to the Chesapeake Board.
